Investors in search of an Index fund might want to consider looking at Vanguard Total Stock Market Index Admiral (VTSAX). The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VTSAX. The Vanguard Total Stock Market Index Admiral made its debut in November of 2000 and VTSAX has managed to accumulate roughly $202.15 billion in assets, as of the most recently available information. The fund is currently managed by Gerard C. O'Reilly (NASDAQ:ORLY) who has been in charge of the fund since November of 2000.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 10.38%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 14.21%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. VTSAX's standard deviation over the past three years is 11.61% compared to the category average of 8.87%. The fund's standard deviation over the past 5 years is 11.59% compared to the category average of 9%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. VTSAX lost 50.84% in the most recent bear market and underperformed its peer group by 5.3%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.02, which means it is hypothetically as volatile as the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. Over the past 5 years, the fund has a negative alpha of -0.71. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is principally on equities that are traded in the United States.
Currently, this mutual fund is holding 99.22% stock in stocks, which have an average market capitalization of $202.79 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
- Industrial Cyclical
Turnover is about 6%, so those in charge of the fund make fewer trades than its comparable peers.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VTSAX is a no load fund. It has an expense ratio of 0.04% compared to the category average of 0.74%. So, VTSAX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to be at least $1.
Bottom Line
Want even more information about VTSAX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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